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Can we ask job applicants about their salary history?

Overseas there is pressure to discourage asking applicants about their salary history
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Can we ask job applicants about their salary history?

Can we ask job applicants about their salary history?

16 October 2019

Asking job applicants what they are currently earning is regarded as a routine question in job interviews, but overseas there is evidence of pressure to discourage it. What are the pros and cons of doing it?

The case against asking

Some US States and cities have implemented bans on employers asking job applicants about their salary history and current earnings. In some cases, this has been done by legislation. The arguments presented in favour of such bans are as follows:
  • Doing so is likely to perpetuate any gender pay gap, because pay decisions will be influenced by past (and arguably discriminatory) practices.
  • Remuneration offered to each candidate should be based solely on their skills, experience and the value of the work to the employer.
  • There may be valid reasons why some applicants have been paid more than others in the past (eg they worked in high-cost or high-paying geographical locations) but those reasons may also have been discriminatory. In either case, they should no longer be relevant.
  • Not asking about remuneration reduces the risk of a future discrimination claim being brought against the employer – even if the employer did not intend to discriminate when asking the question.
  • An applicant may have been historically underpaid (or overpaid) in the past in relation to his/her skills and ability, and relying on the historical information may influence the employer to make inaccurate comparisons between applicants. A lower-paid employee may in fact be more accomplished and more suitable.
  • If an applicant has a history of being underpaid, they may have lower expectations of future employers, and could be taken advantage of.
  • Given cost-saving pressures that often arise in recruitment, that pressure may take precedence over merit when comparing applicants.

The case against banning it

Of the above arguments, the main one appears to be the pressure to remove gender pay inequality. This, however, is a long-running and deep-rooted issue that will require considerable time and effort to overcome.  A ban on asking about salary history is therefore likely to have little impact on the problem. Attempts to deal with other employment issues (such as modern slavery) suggest that “bans” that rely mainly on peer pressure or the possibility of adverse publicity tend to be ineffective in cases of recalcitrant employers.

A legislated ban would be a heavy-handed approach, and in any case there would still be loopholes around it. For example, even in the US States and cities that have implemented bans, it is not expressly unlawful to ask an applicant about their  remuneration aspirations or expectations for the role. The answers may be influenced by the applicant’s past experiences, as noted above.

A “band-aid” approach?

A summary of the above could be that a ban on asking about remuneration history would merely be a “band-aid” approach to a deep-seated problem. The real solution is to evaluate employment and recruitment practices to ensure that they are not discriminatory (eg on the basis of gender), either directly or indirectly, and also to adopt a policy of paying all employees what they, and the jobs they perform, are genuinely worth.

The legal position in Australia

It is not unlawful to ask job applicants questions about their salary history or salary expectations. It is unlawful, however, to use the information obtained to discriminate against an applicant on a ground prohibited by anti-discrimination legislation, such as gender, race, age, etc. It is also unlawful to treat an applicant less favourably because of one of those grounds, for example to pay a woman less than a man (or vice versa) for the same job when both employees are of similar merit, or to downgrade the status of a job depending on the successful applicant.

By Mike Toten

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